According to reports, Merrill Lynch has agreed to pay a $450,000 fine and accept a censure in a case involving supervision of structured-product sales.
In a settlement agreement with the Financial Industry Regulatory Authority Inc. (FINRA), FINRA claims that from 2006 through March 2009, Merrill Lynch did not have an automated compliance reporting system to flag potentially unsuitable concentrations of structured products in customer accounts.
Merrill generally relies on such automated reports in its oversight system and in ensuring that financial advisor recommendations are appropriate.
During the time period at issue, Finra said the firm’s customers made 650,000 purchases of structured products and that more than half of the products were issued by Merrill Lynch’s parent company.
The sale of complex and risky “structured products” has increased in the securities industry and this fine just underscores the focus FINRA has on the sales practices used by firms in recommending these products.
The White Law Group continues to file FINRA arbitration claims to help investors recover losses in structured products. Often times, broker-dealers fail to adequately disclose the risks and mechanizations of these complex products in derogation of their fiduciary duty to their clients.
To speak to a securities attorney regarding a structured product you purchased, please call the securities attorneys of The White Law Group at 312/238-9650 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm based in Chicago, Illinois and Boca Raton, Florida. For more information on the firm, visit https://www.whitesecuritieslaw.com.